Bitcoin (BTC) recently surged beyond $64,000, a key resistance level that had been holding back bulls throughout October. However, analysts suggest that this move may not guarantee sustained bullish momentum, as multiple indicators point to the possibility of a retracement toward $60,000. The question now is whether the $64K support level will be enough to prevent further losses.

The October Breakout: A Short-Lived Victory?

Bitcoin’s climb past the $64K mark on October 14, 2024, marked a 5.1% increase, which was likely fueled by massive spot ETF inflows. This surge excited investors, as it overcame a resistance level that had kept the cryptocurrency trading within a tight range between $60.2K and $64.1K for most of October. Despite this breakthrough, BTC encountered fresh resistance at $66.5K, coinciding with the highs from late September.

Market watchers are now closely observing whether Bitcoin can sustain this momentum. The channel highs and local resistance suggest that the path ahead could be challenging for bulls. A session close above $66.5K would have been a stronger signal of bullish confidence, but so far, Bitcoin has failed to break this level convincingly.

Why $64K Support Matters

The $64K mark, which Bitcoin managed to break through, now serves as a crucial support level. If BTC manages to hold above this level, it could offer hope for the bulls, but there are warning signs that this support might be tested soon.

The On-Balance Volume (OBV) indicator, which tracks buying and selling pressure, shows that while Bitcoin’s price surged past $64K, the OBV lagged behind. This discrepancy signals that recent price gains haven’t been supported by enough buying volume to sustain a strong rally. In fact, Bitcoin’s current resistance at $66.5K appears to mirror a previous point of rejection, further highlighting the potential for a pullback.

Is a Short Squeeze on the Horizon?

Looking at Bitcoin’s liquidation heatmap, there is a concentration of liquidation levels between $66.6K and $67.4K, which suggests that the market may see an uptick in price before sellers regain control. These liquidity pools often attract short-term volatility as traders seek to trigger liquidations in both directions.

However, despite the prospect of a brief rise to these levels, a retracement toward $60K appears increasingly possible. Analysts warn that the current setup could lead to a rejection near the highs, prompting a broader dip in Bitcoin’s price. Traders should be prepared for this potential downturn and manage their risk accordingly, especially as market volatility continues to rise.

ETF Inflows: A Major Player but Not the Whole Story

One of the significant drivers behind Bitcoin’s recent price movements has been the record-breaking inflows into Bitcoin spot ETFs. This influx of capital has likely contributed to the 5.1% price jump in recent days, but it’s essential to keep in mind that ETF trading volumes represent only a fraction of the total market.

While institutional interest in Bitcoin through ETFs is undeniably bullish for the long term, it doesn’t guarantee short-term price stability. Other factors, including overall market sentiment, technical indicators, and global macroeconomic conditions, will play a crucial role in determining whether Bitcoin can maintain its current price level or see further losses.

What Do the Indicators Say?

Looking deeper into the technical indicators, the OBV’s failure to clear local highs serves as a cautionary signal. It suggests that while Bitcoin has been gaining in price, the underlying buying pressure hasn’t been strong enough to support sustained upward momentum. This divergence between price and volume is often a precursor to a market correction.

Moreover, the liquidation heatmap shows that while there is liquidity to push prices slightly higher, the real risk lies in the potential for a rapid sell-off. If Bitcoin fails to hold the $64K support, a decline toward $60K could be swift, with additional liquidations exacerbating the downward pressure.

What’s Next for Bitcoin?

Bitcoin’s near-term future remains uncertain. While the recent price surge beyond $64K gave bulls hope, there are several factors at play that could limit further gains. The resistance at $66.5K, combined with low buying volume and potential liquidation triggers, points to the possibility of a retracement.

That said, the $64K support level will be key in determining Bitcoin’s next move. A bullish reaction at this level could provide a buying opportunity for swing traders looking to capitalize on a potential rebound. However, if the support breaks, a deeper dip toward $60K is likely.

Should You Buy the Dip?

For investors, the key takeaway is to remain cautious in the current environment. While a pullback to $64K or even $60K could offer a buying opportunity, it’s essential to wait for confirmation that Bitcoin has found strong support before jumping in. Traders should also keep an eye on key indicators like OBV and liquidation levels to gauge market sentiment.

Bitcoin’s long-term outlook remains bullish, particularly with growing institutional interest and spot ETF inflows providing a solid foundation for future growth. However, in the short term, volatility could lead to significant price swings, making it crucial for investors to manage their risk and approach the market with patience.